Operational Visibility: You Can’t Steer by the Rearview Mirror
I bet anything that when you drive your car, you spend most of the time looking out the front windshield. Of course, you will glance at the mirrors, look out the side windows and scan your gauges for any anomalies in the operation of the engine. But, most of the time your attention is focused straight ahead. Operational visibility can often run into the same issue.
Imagine for a minute how difficult it would be to drive your car with the front windshield blacked out and your only visual option being the rearview mirrors on the sides of the car and the overhead mirror inside the car. No doubt your forward progress would be very slow and tentative. In some cases, you would likely just have to guess which way to steer.
This is the problem that some businesses have with their own strategic planning. The only data they have to base their decisions on is historical performance data. While this can be helpful, it is useless as your primary source of planning information. What is needed is visibility into the daily operations—the ongoing real-time processes that define the activities of the organization.
Consider this example. You have a sales rep who’s engaged in a selling cycle. There is a lot of activity around this deal because it involves a lot of customization of your product. The sales rep is working with product management, engineering and distribution to ensure that the product his customer wants can be produced and delivered.
An operations manager reviewing this transaction would be alerted to the fact that this deal is already costing a lot of money, they would know that there is a limit to what should be risked for this business and they would have the information necessary to make a decision to move forward or abandon the deal. At the very least, they would have the opportunity to make appropriate adjustments to the price of the product.
Operational visibility means all of the information needed is there in real time; it’s just a matter of looking at it and using it to inform your decision-making.
Without this, the alternative is the rearview mirror. A month or two after the fact, the data all percolates to the top of the sales reports, and you notice a special sale. A product that you really don’t make and that you can’t support has been built, sold at a loss and is now supported by your company. It’s already a loser, and the customer hasn’t even called in for support yet.
If only someone would have known this chucklehead was making all of these promises. If only someone had known that these modifications would have been required. It is too late now.
It doesn’t matter if you are looking into your own operation or looking downstream into the subsidiary organization. Operational visibility improves the chances that the business you are conducting is legitimate and profitable.
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